Personal jurisdiction is the power of a court to hear and rule on matters that bind a defendant based on the defendant’s contact with the state where place where the court is located. Courts employ a specific test to determine whether personal jurisdiction exists in a particular case. In a recent case a Georgia appellate court considered personal jurisdiction in a personal injury case.
The case arose when a defendant made a motion to dismiss for lack of personal jurisdiction. The plaintiff had fallen and died while a resident at a nursing home, which was a subsidiary of Drumm. His widow filed a personal injury action against the nursing home and seven other entities including Drumm as the nursing home’s parent corporation. She alleged corporate negligence, ordinary negligence, violation of the Bill of Rights for Residents of Long-term Care Facilities, medical malpractice, fraud, and wrongful death.
Drumm answered and made a motion to dismiss for lack of personal jurisdiction, arguing it had no contacts with Georgia and that its subsidiary’s actions could not be attributed to it. Personal jurisdiction over an out-of-state defendant depends on Georgia’s long-arm statute.
The long-arm statute allows a Georgia court to exercise personal jurisdiction over a nonresident in a personal injury action in one of these four situations: (1) where the nonresident transacts business within Georgia, (2) commits certain torts within Georgia, (3) commits tortious injury in Georgia and regularly does business or engages in other persistent courses of conduct or derives significant revenue from goods and services rendered in Georgia; or (4) owns real property in Georgia.
In this case, the plaintiff had asserted jurisdiction under the first section, arguing Drumm transacted business within Georgia. A three-part test is applied to determine whether this first scenario applies.
“Transacting business” has occurred if (1) the nonresident purposefully did an act or consummated a transaction in Georgia, (2) if the cause of action arises out of that act or transaction, and (3) if exercising jurisdiction is fair and substantially just.
The first two factors are considered the “minimum contacts” portion of the test. The third factor is only considered if the first two are met.
Minimum contact does not require the nonresident’s physical presence. Even one event can be enough to find minimum contact.
Drumm had presented an affidavit from the sole member and shareholder of Drumm. The vice president who signed the affidavit attested to Drumm as a Deleware entity and that no member of Drumm lived in Georgia. Drumm was merely an investor in a healthcare company, including the one that owned the nursing home at issue. However, Drugg had no offices or website in Georgia, nor solicited business there. Drumm did not actually own or operate a nursing home facility in Georgia. It did not have a direct ownership interest in Golden Living Center Rome, the nursing facility.
The plaintiff argued Drumm had minimum contacts because it paid franchise tax in Georgia and its vice presidents were somewhat involved in “healthcare operations.”
The appellate court explained that the tax was insufficient. The Drumm officers whose responsibilities were in healthcare were working within Drumm, not dealing with the nursing home. The court explained that so long as a parent corporation and subsidiary keep separate and distinct corporate entities, the presence of one in a state cannot be attributed to the other.
If you are seriously injured due to someone else’s negligence, it is worthwhile to seek the advice of counsel. Experienced Atlanta personal injury attorney Terrence R. Bethune can evaluate your case and fight for any compensation you may deserve. Contact us at 404-875-7800 or via our online form.
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